Compilation of the Social Security Laws

Sec. 201. [42 U.S.C. 401](a) There is hereby
created on the books of the Treasury of the United States a trust
fund to be known as the “Federal Old-Age and Survivors Insurance
Trust Fund”. The Federal Old-Age and Survivors Insurance Trust
Fund shall consist of the securities held by the Secretary of the
Treasury for the Old-Age Reserve Account and the amount standing to
the credit of the Old-Age Reserve Account on the books of the Treasury
on January 1, 1940, which securities and amount the Secretary of the
Treasury is authorized and directed to transfer to the Federal Old-Age
and Survivors Insurance Trust Fund, and, in addition, such gifts and
bequests as may be made as provided in subsection (i)(1), and such
amounts as may be appropriated to, or deposited in, the Federal Old-Age
and Survivors Insurance Trust Fund as hereinafter provided. There
is hereby appropriated to the Federal Old-Age and Survivors Insurance
Trust Fund for the fiscal year ending June 30, 1941, and for each
fiscal year thereafter, out of any moneys in the Treasury not otherwise
appropriated, amounts equivalent to 100 per centum of—

(1) the taxes (including
interest, penalties, and additions to the taxes) received under subchapter
A of chapter 9 of the Internal Revenue Code of 1939[4] (and covered into the Treasury)
which are deposited into the Treasury by collectors of internal revenue
before January 1, 1951; and

(2) the taxes certified
each month by the Commissioner of Internal Revenue as taxes received
under subchapter A of chapter 9 of such Code which are deposited into
the Treasury by collectors of internal revenue after December 31,
1950, and before January 1, 1953, with respect to assessments of such
taxes made before January 1, 1951; and

(3) the taxes imposed
by subchapter A of chapter 9 of such Code with respect to wages (as
defined in section 1426 of such Code), and by chapter 21 (other than
sections 3101(b) and 3111(b)) of the Internal Revenue Code of 1954[5] with respect to wages (as defined in section 3121 of such Code[6]) reported to the Commissioner of Internal Revenue pursuant
to section 1420(c) of the Internal Revenue Code of 1939 after December
31, 1950, or to the Secretary of the Treasury or his delegates pursuant
to subtitle F of the Internal Revenue Code of 1954 after December
31, 1954, as determined by the Secretary of the Treasury by applying
the applicable rates of tax under such subchapter or chapter 21 (other
than sections 3101(b) and 3111(b)) to such wages, which wages shall
be certified by the Commissioner of Social Security on the basis of
the records of wages established and maintained by such Commissioner
in accordance with such reports, less the amounts specified in clause
(1) of subsection (b) of this section; and

(4) the taxes imposed
by subchapter E of chapter 1 of the Internal Revenue Code of 1939,
with respect to self-employment income (as defined in section 481
of such Code), and by chapter 2 (other than section 1401(b)) of the
Internal Revenue Code of 1954[7] with respect to self-employment
income (as defined in section 1402 of such Code[8]) reported
to the Commissioner of Internal Revenue on tax returns under such
subchapter or to the Secretary of the Treasury or his delegate on
tax returns under subtitle F of such Code, as determined by the Secretary
of the Treasury by applying the applicable rate of tax under such
subchapter or chapter (other than section 1401(b)) to such self-employment
income, which self-employment income shall be certified by the Commissioner
of Social Security on the basis of the records of self-employment
income established and maintained by the Commissioner of Social Security
in accordance with such returns, less the amounts specified in clause
(2) of subsection (b) of this section.

The amounts appropriated by clauses (3) and (4) shall be transferred
from time to time from the general fund in the Treasury to the Federal
Old-Age and Survivors Insurance Trust Fund, and the amounts appropriated
by clauses (1) and (2) of subsection (b) shall be transferred from
time to time from the general fund in the Treasury to the Federal
Disability Insurance Trust Fund, such amounts to be determined on
the basis of estimates by the Secretary of the Treasury of the taxes,
specified in clauses (3) and (4) of this subsection, paid to or deposited
into the Treasury; and proper adjustments shall be made in amounts
subsequently transferred to the extent prior estimates were in excess
of or were less than the taxes specified in such clauses (3) and (4)
of this subsection. All amounts transferred to either Trust Fund under
the preceding sentence shall be invested by the Managing Trustee in
the same manner and to the same extent as the other assets of such
Trust Fund. Notwithstanding the preceding sentence, in any case in
which the Secretary of the Treasury determines that the assets of
either such Trust Fund would otherwise be inadequate to meet such
Fund’s obligations for any month, the Secretary of the Treasury
shall transfer to such Trust Fund on the first day of such month the
amount which would have been transferred to such Fund under this section
as in effect on October 1, 1990; and such Trust Fund shall pay interest
to the general fund on the amount so transferred on the first day
of any month at a rate (calculated on a daily basis, and applied against
the difference between the amount so transferred on such first day
and the amount which would have been transferred to the Trust Fund
up to that day under the procedures in effect on January 1, 1983)
equal to the rate earned by the investments of such Fund in the same
month under subsection (d).

(b) There is hereby
created on the books of the Treasury of the United States a trust
fund to be known as the “Federal Disability Insurance Trust
Fund”. The Federal Disability Insurance Trust Fund shall consist
of such gifts and bequests as may be made as provided in subsection
(i)(1), and such amounts as may be appropriated to, or deposited in,
such fund as provided in this section. There is hereby appropriated
to the Federal Disability Insurance Trust Fund for the fiscal year
ending June 30, 1957, and for each fiscal year thereafter, out of
any moneys in the Treasury not otherwise appropriated, amounts equivalent
to 100 per centum of—

(1)(A) 1/2 of 1 per centum of the wages (as defined
in section 3121 of the Internal Revenue Code of 1954[9]) paid
after December 31, 1956, and before January 1, 1966, and reported
to the Secretary of the Treasury or his delegate pursuant to subtitle
F of the Internal Revenue Code of 1954, (B) 0.70 of 1 per centum of
the wages (as so defined) paid after December 31, 1965, and before
January 1, 1968, and so reported, (C) 0.95 of 1 per centum of the
wages (as so defined) paid after December 31, 1967, and before January
1, 1970, and so reported, (D) 1.10 per centum of the wages (as so
defined) paid after December 31, 1969, and before January 1, 1973,
and so reported, (E) 1.1 per centum of the wages (as so defined) paid
after December 31, 1972, and before January 1, 1974, and so reported,
(F) 1.15 per centum of the wages (as so defined) paid after December
31, 1973, and before January 1, 1978, and so reported, (G) 1.55 per
centum of the wages (as so defined) paid after December 31, 1977,
and before January 1, 1979, and so reported, (H) 1.50 per centum of
the wages (as so defined) paid after December 31, 1978, and before
January 1, 1980, and so reported, (I) 1.12 per centum of the wages
(as so defined) paid after December 31, 1979, and before January 1,
1981, and so reported, (J) 1.30 per centum of the wages (as so defined)
paid after December 31, 1980, and before January 1, 1982, and so reported,
(K) 1.65 per centum of the wages (as so defined) paid after December
31, 1981, and before January 1, 1983, and so reported, (L) 1.25 per
centum of the wages (as so defined) paid after December 31, 1982,
and before January 1, 1984, and so reported, (M) 1.00 per centum of
the wages (as so defined) paid after December 31, 1983, and before
January 1, 1988, and so reported, (N) 1.06 per centum of the wages
(as so defined) paid after December 31, 1987, and before January 1,
1990, and so reported, (O) 1.20 per centum of the wages (as so defined)
paid after December 31, 1989, and before January 1, 1994, and so reported,
(P) 1.88 per centum of the wages (as so defined) paid after December
31, 1993, and before January 1, 1997, and so reported, (Q) 1.70 per
centum of the wages (as so defined) paid after December 31, 1996,
and before January 1, 2000, and so reported, and (R) 1.80 per centum
of the wages (as so defined) paid after December 31, 1999, and so
reported, which wages shall be certified by the Commissioner of Social
Security on the basis of the records of wages established and maintained
by such Commissioner in accordance with such reports; and

(2)(A) 3/8 of 1 per centum of the amount of self-employment
income (as defined in section 1402 of the Internal Revenue Code of
1954[10]) reported to the Secretary of the Treasury or his delegate
on tax returns under subtitle F of the Internal Revenue Code of 1954
for any taxable year beginning after December 31, 1956, and before
January 1, 1966, (B) 0.525 of 1 per centum of the amount of self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1965, and before January 1, 1968, (C) 0.7125 of
1 per centum of the amount of self-employment income (as so defined)
so reported for any taxable year beginning after December 31, 1967,
and before January 1, 1970, (D) 0.825 of 1 per centum of the amount
of self-employment income (as so defined) so reported for any taxable
year beginning after December 31, 1969, and before January 1, 1973,
(E) 0.795 of 1 per centum of the amount of self-employment income
(as so defined) so reported for any taxable year beginning after December
31, 1972, and before January 1, 1974, (F) 0.815 of 1 per centum of
the amount of self-employment income (as so defined) as reported for
any taxable year beginning after December 31, 1973, and before January
1, 1978, (G) 1.090 per centum of the amount of self-employment income
(as so defined) so reported for any taxable year beginning after December
31, 1977, and before January 1, 1979, (H) 1.0400 per centum of the
amount of self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1978, and before January
1, 1980, (I) 0.7775 per centum of the amount of self-employment income
(as so defined) so reported for any taxable year beginning after December
31, 1979, and before January 1, 1981, (J) 0.9750 per centum of the
amount of self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1980, and before January
1, 1982, (K) 1.2375 per centum of the amount of self-employment income
(as so defined) so reported for any taxable year beginning after December
31, 1981, and before January 1, 1983, (L) 0.9375 per centum of the
amount of self-employment income (as so defined) so reported for any
taxable year beginning after December 31, 1982, and before January
1, 1984, (M) 1.00 per centum of the amount of self-employment income
(as so defined) so reported for any taxable year beginning after December
31, 1983, and before January 1, 1988, (N) 1.06 per centum of the self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1987, and before January 1, 1990, (O) 1.20 per
centum of the amount of self-employment income (as so defined) so
reported for any taxable year beginning after December 31, 1989, and
before January 1, 1994, (P) 1.88 per centum of the amount of self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1993, and before January 1, 1997, (Q) 1.70 per
centum of the amount of self-employment income (as so defined) so
reported for any taxable year beginning after December 31, 1996, and
before January 1, 2000, and (R) 1.80 per centum of the amount of self-employment
income (as so defined) so reported for any taxable year beginning
after December 31, 1999, which self-employment income shall be certified
by the Commissioner of Social Security on the basis of the records
of self-employment income established and maintained by the Commissioner
of Social Security in accordance with such returns.

(c) With respect to
the Federal Old-Age and Survivors Insurance Trust Fund and the Federal
Disability Insurance Trust Fund (hereinafter in this title called
the “Trust Funds”) there is hereby created a body to
be known as the Board of Trustees of the Trust Funds (hereinafter
in this title called the “Board of Trustees”) which Board
of Trustees shall be composed of the Commissioner of Social Security,
the Secretary of the Treasury, the Secretary of Labor, and the Secretary
of Health and Human Services, all ex officio, and of two members of
the public (both of whom may not be from the same political party),
who shall be nominated by the President for a term of four years and
subject to confirmation by the Senate. A member of the Board of Trustees
serving as a member of the public and nominated and confirmed to fill
a vacancy occurring during a term shall be nominated and confirmed
only for the remainder of such term. An individual nominated and confirmed
as a member of the public may serve in such position after the expiration
of such member’s term until the earlier of the time at which
the member’s successor takes office or the time at which a report
of the Board is first issued under paragraph (2) after the expiration
of the member’s term. The Secretary of the Treasury shall be
the Managing Trustee of the Board of Trustees (hereinafter in this
title called the “Managing Trustee”). The Deputy Commissioner
of Social Security shall serve as Secretary of the Board of Trustees.
The Board of Trustees shall meet not less frequently than once each
calendar year. It shall be the duty of the Board of Trustees to—

(2)[11] Report to the Congress not later than the first day of April of
each year on the operation and status of the Trust Funds during the
preceding fiscal year and on their expected operation and status during
the next ensuing five fiscal years;

(3) Report immediately
to the Congress whenever the Board of Trustees is of the opinion that
the amount of either of the Trust Funds is unduly small;

(4) Recommend improvements
in administrative procedures and policies designed to effectuate the
proper coordination of the old-age and survivors insurance and Federal-State
unemployment compensation program; and

(5) Review the general
policies followed in managing the Trust Funds, and recommend changes
in such policies, including necessary changes in the provisions of
the law which govern the way in which the Trust Funds are to be managed.

The report provided for in paragraph (2) above shall include
a statement of the assets of, and the disbursements made from, the
Trust Funds during the preceding fiscal year, an estimate of the expected
future income to, and disbursements to be made from, the Trust Funds
during each of the next ensuing five fiscal years, and a statement
of the actuarial status of the Trust Funds. Such statement shall include
a finding by the Board of Trustees as to whether the Federal Old-Age
and Survivors Insurance Trust Fund and the Federal Disability Insurance
Trust Fund, individually and collectively, are in close actuarial
balance (as defined by the Board of Trustees). Such report shall include
an actuarial opinion by the Chief Actuary of the Social Security Administration
certifying that the techniques and methodologies used are generally
accepted within the actuarial profession and that the assumptions
and cost estimates used are reasonable. Such report shall also include
an actuarial analysis of the benefit disbursements made from the Federal
Old-Age and Survivors Insurance Trust Fund with respect to disabled
beneficiaries. Such report shall be printed as a House document of
the session of the Congress to which the report is made. A person
serving on the Board of Trustees shall not be considered to be a fiduciary
and shall not be personally liable for actions taken in such capacity
with respect to the Trust Funds.

(d) It shall be the
duty of the Managing Trustee to invest such portion of the Trust Funds
as is not, in his judgment, required to meet current withdrawals.
Such investments may be made only in interest-bearing obligations
of the United States or in obligations guaranteed as to both principal
and interest by the United States. For such purpose such obligations
may be acquired (1) on original issue at the issue price, or (2) by
purchase of outstanding obligations at the market price. The purposes
for which obligations of the United States may be issued under chapter
31 of title 31, United States Code[12], are hereby extended to authorize
the issuance at par of public-debt obligations for purchase by the
Trust Funds. Such obligations issued for purchase by the Trust Funds
shall have maturities fixed with due regard for the needs of the Trust
Funds and shall bear interest at a rate equal to the average market
yield (computed by the Managing Trustee on the basis of market quotations
as of the end of the calendar month next preceding the date of such
issue) on all marketable interest-bearing obligations of the United
States then forming a part of the public debt which are not due or
callable until after the expiration of four years from the end of
such calendar month; except that where such average market yield is
not a multiple of one-eighth of 1 per centum, the rate of interest
of such obligations shall be the multiple of one-eighth of 1 per centum
nearest such market yield. Each obligation issued for purchase by
the Trust Funds under this subsection shall be evidenced by a paper
instrument in the form of a bond, note, or certificate of indebtedness
issued by the Secretary of the Treasury setting forth the principal
amount, date of maturity, and interest rate of the obligation, and
stating on its face that the obligation shall be incontestable in
the hands of the Trust Fund to which it is issued, that the obligation
is supported by the full faith and credit of the United States, and
that the United States is pledged to the payment of the obligation
with respect to both principal and interest. The Managing Trustee
may purchase other interest-bearing obligations of the United States
or obligations guaranteed as to both principal and interest by the
United States, on original issue or at the market price, only where
he determines that the purchase of such other obligations is in the
public interest.

(e) Any obligations
acquired by the Trust Funds (except public-debt obligations issued
exclusively to the Trust Funds) may be sold by the Managing Trustee
at the market price, and such public-debt obligations may be redeemed
at par plus accrued interest.

(f) The interest on,
and the proceeds from the sale or redemption of, any obligations held
in the Federal Old-Age and Survivors Insurance Trust Fund and the
Federal Disability Insurance Trust Fund shall be credited to and form
a part of the Federal Old-Age and Survivors Insurance Trust Fund and
the Disability Insurance Trust Fund, respectively. Payment from the
general fund of the Treasury to either of the Trust Funds of any such
interest or proceeds shall be in the form of paper checks drawn on
such general fund to the order of such Trust Fund.[13]

(g)(1)(A) The Managing
Trustee of the Trust Funds (which for purposes of this paragraph shall
include also the Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund established by title XVIII)
is directed to pay from the Trust Funds into the Treasury—

(i) the amounts estimated
by the Managing Trustee, the Commissioner of Social Security, and
the Secretary of Health and Human Services which will be expended,
out of moneys appropriated from the general fund in the Treasury,
during a three-month period by the Department of Health and Human
Services for the administration of title XVIII of this Act, and by
the Department of the Treasury for the administration of titles II
and XVIII of this Act and chapters 2 and 21 of the Internal Revenue
Code of 1986, less

(ii) the amounts
estimated (pursuant to the applicable method prescribed under paragraph
(4) of this subsection) by the Commissioner of Social Security which
will be expended, out of moneys made available for expenditures from
the Trust Funds, during such three-month period to cover the cost
of carrying out the functions of the Social Security Administration,
specified in section 232, which relate to the administration of provisions of the Internal
Revenue Code of 1986 other than those referred to in clause (i) and
the functions of the Social Security Administration in connection
with the withholding of taxes from benefits, as described in section 207(c), pursuant to
requests by persons entitled to such benefits or such persons’
representative payee.[14]

Such payments shall be carried into the Treasury as the net
amount of repayments due the general fund account for reimbursement
of expenses incurred in connection with the administration of titles
II and XVIII of this Act and chapters 2 and 21 of the Internal Revenue
Code of 1986.[15] A final accounting of such payments for any fiscal year
shall be made at the earliest practicable date after the close thereof.
There are hereby authorized to be made available for expenditure,
out of any or all of the Trust Funds, such amounts as the Congress
may deem appropriate to pay the costs of the part of the administration
of this title, title VIII, title XVI, and title XVIII for which the
Commissioner of Social Security is responsible, the costs of title
XVIII for which the Secretary of Health and Human Services is responsible,
and the costs of carrying out the functions of the Social Security
Administration, specified in section 232, which relate to the administration
of provisions of the Internal Revenue Code of 1986 other than those
referred to in clause (i) of the first sentence of this subparagraph
and the functions of the Social Security Administration in connection
with the withholding of taxes from benefits, as described in section 207(c), pursuant to
requests by persons entitled to such benefits or such persons’
representative payee. Of the amounts authorized to be made available
out of the Federal Old–Age and Survivors Insurance Trust Fund
and the Federal Disability Insurance Trust Fund under the preceding
sentence, there are hereby authorized to be made available from either
or both of such Trust Funds for continuing disability reviews—

For purposes of this subparagraph, the term “continuing
disability review” means a review conducted pursuant to section 221(i) and a review
or disability eligibility redetermination conducted to determine the
continuing disability and eligibility of a recipient of benefits under
the supplemental security income program under title XVI, including
any review or redetermination conducted pursuant to section 207 or
208 of the Social Security Independence and Program Improvements Act
of 1994 (Public Law 103-296).

(I) the portion
of the costs, incurred during such fiscal year, of administration
of this title, title VIII, title XVI, and title XVIII for which the
Commissioner is responsible and of carrying out the functions of the
Social Security Administration, specified in section 232, which relate to
the administration of provisions of the Internal Revenue Code of 1986
(other than those referred to in clause (i) of the first sentence
of subparagraph (A)) and the functions of the Social Security Administration
in connection with the withholding of taxes from benefits, as described
in section 207(c), pursuant to requests by persons entitled to such benefits or such
persons’ representative payee, which should have been borne
by the general fund of the Treasury,

(II) the portion
of such costs which should have been borne by the Federal Old-Age
and Survivors Insurance Trust Fund,

(III) the portion
of such costs which should have been borne by the Federal Disability
Insurance Trust Fund,

(IV) the portion
of such costs which should have been borne by the Federal Hospital
Insurance Trust Fund, and

(V) the portion
of such costs which should have been borne by the Federal Supplementary
Medical Insurance Trust Fund (and, of such portion, the portion of
such costs which should have been borne by the Medicare Prescription
Drug Account in such Trust Fund), and

(I) the portion
of the costs, incurred during such fiscal year, of the administration
of title XVIII for which the Secretary is responsible, which should
have been borne by the general fund of the Treasury,

(II) the portion
of such costs which should have been borne by the Federal Hospital
Insurance Trust Fund, and

(III) the
portion of such costs which should have been borne by the Federal
Supplementary Medical Insurance Trust Fund (and, of such portion,
the portion of such costs which should have been borne by the Medicare
Prescription Drug Account in such Trust Fund).

(C) After the
determinations under subparagraph (B) have been made for any fiscal
year, the Commissioner of Social Security and the Secretary shall
each certify to the Managing Trustee the amounts, if any, which should
be transferred from one to any of the other such Trust Funds and the
amounts, if any, which should be transferred between the Trust Funds
(or one of the Trust Funds) and the general fund of the Treasury,
in order to ensure that each of the Trust Funds and the general fund
of the Treasury have borne their proper share of the costs, incurred
during such fiscal year, for—

(i) the parts of the
administration of this title, title VIII, title XVI, and title XVIII
for which the Commissioner of Social Security is responsible,

(ii) the parts of
the administration of title XVIII for which the Secretary is responsible,
and

(iii) carrying out
the functions of the Social Security Administration, specified in
section 232, which
relate to the administration of provisions of the Internal Revenue
Code of 1986 (other than those referred to in clause (i) of the first
sentence of subparagraph (A)) and the functions of the Social Security
Administration in connection with the withholding of taxes from benefits,
as described in section 207(c), pursuant to requests by persons entitled to such benefits
or such persons’ representative payee.

The Managing Trustee shall transfer any such amounts in accordance
with any certification so made.

(D) The determinations
required under subclauses (IV) and (V) of subparagraph (B)(i) shall
be made in accordance with the cost allocation methodology in existence
on the date of the enactment of the Social Security Independence and
Program Improvements Act of 1994, until such time as the methodology
for making the determinations required under such subclauses is revised
by agreement of the Commissioner and the Secretary, except that the
determination of the amounts to be borne by the general fund of the
Treasury with respect to expenditures incurred in carrying out the
functions of the Social Security Administration specified in section 232 and the functions
of the Social Security Administration in connection with the withholding
of taxes from benefits as described in section 207(c) shall be made pursuant to the
applicable method prescribed under paragraph (4).

(2) The Managing Trustee
is directed to pay from time to time from the Trust Funds into the
Treasury the amount estimated by him as taxes imposed under section
3101(a) of the Internal Revenue Code of 1986 which are subject to
refund under section 6413(c) of such Code with respect to wages (as
defined in section 3121 of such Code). Such taxes shall be determined
on the basis of the records of wages maintained by the Commissioner
of Social Security in accordance with the wages reported to the Secretary
of the Treasury or his delegate pursuant to subtitle F of such Code,
and the Commissioner of Social Security shall furnish the Managing
Trustee such information as may be required by the Trustee for such
purpose. The payments by the Managing Trustee shall be covered into
the Treasury as repayments to the account for refunding internal revenue
collections. Payments pursuant to the first sentence of this paragraph
shall be made from the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund in the ratio
in which amounts were appropriated to such Trust Funds under clause
(3) of subsection (a) of this section and clause (1) of subsection
(b) of this section.

(3) Repayments made
under paragraph (1) or (2) shall not be available for expenditures
but shall be carried to the surplus fund of the Treasury. If it subsequently
appears that the estimates under either such paragraph in any particular
period were too high or too low, appropriate adjustments shall be
made by the Managing Trustee in future payments.

(4) The Commissioner
of Social Security shall utilize the method prescribed pursuant to
this paragraph, as in effect immediately before the date of the enactment
of the Social Security Independence and Program Improvements Act of
1994, for determining the costs which should be borne by the general
fund of the Treasury of carrying out the functions of the Commissioner,
specified in section 232, which relate to the administration of provisions of the Internal
Revenue Code of 1986 (other than those referred to in clause (i) of
the first sentence of paragraph (1)(A)). The Board of Trustees of
such Trust Funds shall prescribe the method of determining the costs
which should be borne by the general fund in the Treasury of carrying
out the functions of the Social Security Administration in connection
with the withholding of taxes from benefits, as described in section 207(c), pursuant to
requests by persons entitled to such benefits or such persons’
representative payee. If at any time or times thereafter the Boards
of Trustees of such Trust Funds consider such action advisable, they
may modify the method of determining such costs.[16]

(h) Benefit payments
required to be made under section 223, and benefit payments required to be
made under subsection (b), (c), or (d) of section 202 to individuals entitled to benefits
on the basis of the wages and self-employment income of an individual
entitled to disability insurance benefits, shall be made only from
the Federal Disability Insurance Trust Fund. All other benefit payments
required to be made under this title (other than section 226) shall be made only
from the Federal Old-Age and Survivors Insurance Trust Fund.

(i)(1) The Managing Trustee
may accept on behalf of the United States money gifts and bequests
made unconditionally to the Federal Old-Age and Survivors Insurance
Trust Fund, the Federal Disability Insurance Trust Fund, the Federal
Hospital Insurance Trust Fund, or the Federal Supplementary Medical
Insurance Trust Fund (and for the Medicare Prescription Drug Account
and the Transitional Assistance Account in such Trust Fund) or to
the Social Security Administration, the Department of Health and Human
Services, or any part or officer thereof, for the benefit of any of
such Funds or any activity financed through such Funds.[17]

(2) Any such gift accepted
pursuant to the authority granted in paragraph (1) of this subsection
shall be deposited in—

(B) if the donor
has not so designated, the Federal Old-Age and Survivors Insurance
Trust Fund.

(j) There are authorized
to be made available for expenditure, out of the Federal Old-Age and
Survivors Insurance Trust Fund, or the Federal Disability Insurance
Trust Fund (as determined appropriate by the Commissioner of Social
Security), such amounts as are required to pay travel expenses, either
on an actual cost or commuted basis, to individuals for travel incident
to medical examinations requested by the Commissioner of Social Security
in connection with disability determinations under this title, and
to parties, their representatives, and all reasonably necessary witnesses
for travel within the United States (as defined in section 210(i)) to attend reconsideration
interviews and proceedings before administrative law judges with respect
to any determination under this title. The amount available under
the preceding sentence for payment for air travel by any person shall
not exceed the coach fare for air travel between the points involved
unless the use of first-class accommodations is required (as determined
under regulations of the Commissioner of Social Security) because
of such person’s health condition or the unavailability of alternative
accommodations; and the amount available for payment for other travel
by any person shall not exceed the cost of travel (between the points
involved) by the most economical and expeditious means of transportation
appropriate to such person’s health condition, as specified
in such regulations. The amount available for payment under this subsection
for travel by a representative to attend an administrative proceeding
before an administrative law judge or other adjudicator shall not
exceed the maximum amount allowable under this subsection for such
travel originating within the geographic area of the office having
jurisdiction over such proceeding.

(k) Expenditures made
for experiments and demonstration projects under section 234 shall be made from
the Federal Disability Insurance Trust Fund and the Federal Old-Age
and Survivors Insurance Trust Fund, as determined appropriate by the
Commissioner of Social Security.

(l)(1) If at any time
prior to January 1988 the Managing Trustee determines that borrowing
authorized under this subsection is appropriate in order to best meet
the need for financing the benefit payments from the Federal Old-Age
and Survivors Insurance Trust Fund or the Federal Disability Insurance
Trust Fund, the Managing Trustee may borrow such amounts as he determines
to be appropriate from the other such Trust Fund, or, subject to paragraph
(5), from the Federal Hospital Insurance Trust Fund established under
section 1817,
for transfer to and deposit in the Trust Fund whose need for financing
is involved.

(2) In any case where
a loan has been made to a Trust Fund under paragraph (1), there shall
be transferred on the last day of each month after such loan is made,
from the borrowing Trust Fund to the lending Trust Fund, the total
interest accrued to such day with respect to the unrepaid balance
of such loan at a rate equal to the rate which the lending Trust Fund
would earn on the amount involved if the loan were an investment under
subsection (d) (even if such an investment would earn interest at
a rate different than the rate earned by investments redeemed by the
lending fund in order to make the loan).

(3)(A) If in any
month after a loan has been made to a Trust Fund under paragraph (1),
the Managing Trustee determines that the assets of such Trust Fund
are sufficient to permit repayment of all or part of any loans made
to such Fund under paragraph (1), he shall make such repayments as
he determines to be appropriate.

(B)(i) If on the last
day of any year after a loan has been made under paragraph (1) by
the Federal Hospital Insurance Trust Fund to the Federal Old-Age and
Survivors Insurance Trust Fund or the Federal Disability Insurance
Trust Fund, the Managing Trustee determines that the OASDI trust fund
ratio exceeds 15 percent, he shall transfer from the borrowing Trust
Fund to the Federal Hospital Insurance Trust Fund an amount that—

(I) together
with any amounts transferred from another borrowing Trust Fund under
this paragraph for such year, will reduce the OASDI trust fund ratio
to 15 percent; and

(ii) Amounts required
to be transferred under clause (i) shall be transferred on the last
day of the first month of the year succeeding the year in which the
determination described in clause (i) is made.

(iii) For purposes
of this subparagraph, the term “OASDI trust fund ratio” means, with respect to any calendar year, the ratio of—

(I) the combined
balance in the Federal Old-Age and Survivors Insurance Trust Fund
and the Federal Disability Insurance Trust Fund, as of the last day
of such calendar year, to

(II) the amount
estimated by the Commissioner of Social Security to be the total amount
to be paid from the Federal Old-Age and Survivors Insurance Trust
Fund and the Federal Disability Insurance Trust Fund during the calendar
year following such calendar year for all purposes authorized by section 201 (other than payments
of interest on, and repayments of, loans from the Federal Hospital
Insurance Trust Fund under paragraph (1), but excluding any transfer
payments between such trust funds and reducing the amount of any transfer
to the Railroad Retirement Account by the amount of any transfers
into either such trust fund from that Account).

(C)(i) The full amount
of all loans made under paragraph (1) (whether made before or after
January 1, 1983) shall be repaid at the earliest feasible date and
in any event no later than December 31, 1989.

(ii) For the period
after December 31, 1987, and before January 1, 1990, the Managing
Trustee shall transfer each month to the Federal Hospital Insurance
Trust Fund from any Trust Fund with any amount outstanding on a loan
made from the Federal Hospital Insurance Trust Fund under paragraph
(1) an amount not less than an amount equal to (I) the amount owed
to the Federal Hospital Insurance Trust Fund by such Trust Fund at
the beginning of such month (plus the interest accrued on the outstanding
balance of such loan during such month), divided by (II) the number
of months elapsing after the preceding month and before January 1990.
The Managing Trustee may, during this period, transfer larger amounts
than prescribed by the preceding sentence.

(4) The Board of Trustees
shall make a timely report to the Congress of any amounts transferred
(including interest payments) under this subsection.

(5)(A) No amounts
may be borrowed from the Federal Hospital Insurance Trust Fund under
paragraph (1) during any month if the Hospital Insurance Trust Fund
ratio for such month is less than 10 percent.

(B) For purposes
of this paragraph, the term “Hospital Insurance Trust Fund ratio” means, with respect to any month, the ratio of—

(i) the balance in
the Federal Hospital Insurance Trust Fund, reduced by the outstanding
amount of any loan (including interest thereon) theretofore made to
such Trust Fund under this subsection, as of the last day of the second
month preceding such month, to

(ii) the amount obtained
by multiplying by twelve the total amount which (as estimated by the
Secretary) will be paid from the Federal Hospital Insurance Trust
Fund during the month for which such ratio is to be determined (other
than payments of interest on, or repayments of loans from another
Trust Fund under this subsection), and reducing the amount of any
transfers to the Railroad Retirement Account by the amount of any
transfer into the Hospital Insurance Trust Fund from that Account.

(m)(1) The Secretary of
the Treasury shall implement procedures to permit the identification
of each check issued for benefits under this title that has not been
presented for payment by the close of the sixth month following the
month of its issuance.

(2) The Secretary of
the Treasury shall, on a monthly basis, credit each of the Trust Funds
for the amount of all benefit checks (including interest thereon)
drawn on such Trust Fund more than 6 months previously but not presented
for payment and not previously credited to such Trust Fund, to the
extent provided in advance in appropriation Acts.

(3) If a benefit check
is presented for payment to the Treasury and the amount thereof has
been previously credited pursuant to paragraph (2) to one of the Trust
Funds, the Secretary of the Treasury shall nevertheless pay such check,
if otherwise proper, recharge such Trust Fund, and notify the Commissioner
of Social Security.

(4) A benefit check
bearing a current date may be issued to an individual who did not
negotiate the original benefit check and who surrenders such check
for cancellation if the Secretary of the Treasury determines it is
necessary to effect proper payment of benefits.

(n) Not later than July
1, 2004, the Secretary of the Treasury shall transfer, from amounts
in the general fund of the Treasury that are not otherwise appropriated—

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